Aug

6

To give a fuller perspective of the Chinese stocks, I attach some charts of the different markets. All these are weekly charts from 2006 to now.

To start with,the first here is the Shanghai-Shenzhen 300 Index, comprising the 300 largest stocks on both exchanges. This is the base of the Index futures currently traded on Shanghai Financial Futures Exchange.

The Second is the Shanghai 50 Index, comprising the 50 largest stocks on the Shanghai Exchange.

Most stocks in the above two indexes are of state owned enterprises.

These stocks and the index futures are only available to domestic Chinese and are priced in Chinese Yuan.

As we can see, both are at quite depressing levels.

Third is the index of small caps on the Shenzhen exchange. This comprises stocks of all small, and most importantly, private businesses. Again these are only available to domestic Chinese and are priced in Chinese Yuan.

To compare with the two large cap indexes, this is not nearly as depressing.

Now here are two indexes of stocks priced in other currencies and available for international traders.

The first is Shanghai B-shares index. It comprises all of the less than 100 stocks priced in USD on the Shanghai exchange.

The second is the Shenzhen B-shares index. It comprises all of the less than 100 stocks priced in HKD on the Shenzhen exchange.

While the Shanghai index not too depressing, the Shenzhen index is actually somewhat strong.